The Heckscher-Ohlin theory predicts that trade between developed and developing countries should

a.

consists mainly of manufactured products intensive in medium skilled labor.

b.

be much less than trade between similar industrialized countries.

c.

be much greater than trade between similar industrialized countries.

d.

consist mainly of similar products.

When an increase in output results in an increase in average cost

a.

the industry is likely to be located in only one country.

b.

there are no scale economies.

c.

industries will tend to have an oligopoly structure.

d.

there is most likely a single firm in an industry.

In oligopoly pricing, firms are caught in a situation called prisoner's dilemma when they

a.

compete aggressively and earn low profits.

b.

cooperate to maximize profits.

c.

cooperate to minimize prices.

d.

compete aggressively and earn high profits.